Full Year Results. for the year ended 31 August October 2018

Transcription

1 Full Year Results for the year ended 31 August October 2018

2 Nick Beighton CEO

3 FY 2018 Highlights Another strong trading performance Including an acceleration in P4 to +29% Our biggest ever investment year Maintained focus on our financial disciplines Group sales +26%, Reported PBT +28% to 102.0m Strong KPIs performance including stable ABV Relentless innovation: 2,900 tech releases and 243 delivery solutions improvements 200 localised experiences including Netherlands and Sweden Setting our sights beyond 4billion Capex to remain at current levels of m Guidance unchanged

4 Proven track record of reinvesting for growth Group Revenue ( M) CAPEX ( M) 1, , , , FY 2015 FY 2016 FY 2017 FY 2018 FY 2015 FY 2016 FY 2017 FY 2018 EBIT 1 ROIC 2 4.0% 4.4% 4.1% % % 47% 43% 28% FY 2015 FY 2016 FY 2017 FY 2018 FY 2015 FY 2016 FY 2017 FY EBIT = earnings before interest, tax, exceptional items and discontinued operations 2 ROIC = profit before interest, exceptional items and discontinued operations but after tax, divided by average invested capital (net assets minus cash balance and hedging reserve) Note: All numbers subject to rounding throughout this document

5 Global KPIs UK EU US ROW Active Customers 6.0m (+15%) 7.1m (+25%) 2.5m (+19%) 2.8m (+17%) % Visits on Mobile 81.5% (+470bps) 76.7% (+750bps) 70.5% (+670bps) 74.7% (+780bps) Orders Growth +27% +31% +21% +23% Order Frequency +10% +5% +2% +6% Conversion +40bps +20bps +30bps +10bps ABV +1% +1% +1% +2% Premier Customer Growth +51% +88% +29% n/a VISITS +19% ORDERS +27% ABV +1% FREQUENCY +7% ACTIVE CUSTOMERS +19% SOCIAL FOLLOWERS +13%

6 Global Clothing Market UK Europe 1 US Rest of World 2 Total Apparel market size bn 287.9bn 303.7bn 668.7bn 1,308.2bn Apparel market CAGR % 5% 9% 9% 8% Online apparel market size bn 46.0bn 63.2bn 101.3bn 222.1bn Online apparel market CAGR % 19% 19% 27% 22% Online penetration % 10% 15% 8% 10% Online penetration % 16% 21% 15% 17% ASOS retail sales 861m 724m 312m 369m - ASOS 4 year CAGR 23% 38% 36% 29% - ASOS market share 7.4% 1.6% 0.5% 0.4% - Source: Global Data and ASOS estimates 1 EU data for 22 European countries available through Global Data 2 ROW data for 25 Rest of World countries available through Global Data

7 Our Significant Global Opportunity UK Europe 1 US Rest of World 2 ASOS market share 7.4% 1.6% 0.5% 0.4% Forecast apparel market CAGR % 4% 4% 8% Forecast online apparel market CAGR % 13% 11% 19% Online penetration % 16% 21% 15% Online penetration forecast % 25% 29% 25% Target Audience Penetration % 25% 20% 15% 10% 5% 0% Source: Global Data and ASOS estimates 1 EU data for 22 European countries available through Global Data 2 ROW data for 25 Rest of World countries available through Global Data

8 Sales Growth FY 2018 Group total UK EU US RoW International total Retail sales 2,355.2m 861.3m 739.1m 311.6m 443.2m 1,493.9m Growth 26% 23% 36% 19% 19% 27% CCY 1 Growth 24% 23% 28% 25% 18% 24% Delivery receipts 54.4m 22.3m 15.3m 9.0m 7.8m 32.1m Growth 33% 39% 42% 43% 3% 30% Third party revenues 7.7m 7.4m 0.1m 0.2m - 0.3m Growth 22% 23% Total sales 2,417.3m 891.0m 754.5m 320.8m 451.0m 1,526.3m Growth 26% 24% 36% 20% 19% 27% CCY 1 Growth 24% 24% 28% 26% 18% 24% RETAIL SALES 1, , , ,403.7 FY 2014 FY 2015 FY 2016 FY 2017 FY Constant currency has been calculated to take into account hedged rate movements on hedged sales and spot rate movements on unhedged sales

9 FY 2018 Gross Margin Group total UK EU US RoW International total Gross profit 1,237.1m 411.1m 390.9m 192.9m 242.2m 826.0m Growth 29% 24% 49% 17% 21% 32% Retail gross margin 49.9% 44.3% 50.8% 59.0% 52.9% 53.1% Growth 130bps 10bps 450bps (140bps) 110bps 200bps Gross margin 51.2% 46.1% 51.8% 60.1% 53.7% 54.1% Growth 140bps 20bps 450bps (130bps) 100bps 190bps Group Retail Gross Margin Movements 49.9% 48.6% FY 2017 FX Buying Margin Branded/ASOS Design mix FY 2018

10 Operating costs FY 2018 % of SALES FY 2017 % of SALES CHANGE GUIDANCE FY19 DISTRIBUTION COSTS (15.8%) (15.6%) (20bps) WAREHOUSE (10.0%) (8.8%) (120bps) PAYROLL AND STAFF COSTS 1 (8.0%) (8.5%) 50bps MARKETING (4.4%) (4.5%) 10bps OTHER COSTS (6.5%) (6.1%) (40bps) DEPRECIATION (2.3%) (2.2%) (10bps) 1 Payroll and staff costs include non-cash share based payment charges of 8.9m (2017: 7.6m)

11 Investing to support long term growth 2018 Capex 2019 Capex Guidance 242m m US Hub US Hub Technology Euro hub Euro hub Technology Barnsley Barnsley Space & Facilities Transformation Systems Space/Facilities Transformation Systems Including Sweden & Netherlands sites RoW & RoE sites Next Gen Web & New Navigation Premier into 6 new EU countries Launched Style Match Buy Now Pay Later for UK Product Recommendation Algorithm improved Faster Refunds Launched Enki Homepage Personalisation

12 Statement of Financial Position m At 31 August 2018 At 31 August 2017 Goodwill and other intangible assets Property, plant and equipment Derivative financial assets Deferred tax asset Non-current assets Stock Net current payables (507.1) (452.1) Cash and cash equivalents Derivative financial assets/(liabilities) 3.4 (64.5) Current tax liability (3.0) (5.8) Deferred tax liability (8.2) - Net assets

13 Cash position m (22.4) (213.0) (40.0) Opening cash Trade payable carryover EBITDA Underlying working capital Capex Other Closing cash Note: The Group now has in place a 150m RCF available until May 2021, which was not drawn down at the year end

14 FY19 Guidance No change to FY19 guidance: Reported Sales % Retail Margin flat Capital Expenditure of m Tax Rate c.100 BPS above statutory rate Reported EBIT margin c.4%

15 Our Product The greatest, most relevant edit of great value fashion to an inclusive 20-something audience Collusion launched 4505 launched Newness & fashion focus 300 new brands ASOS Design c.40% of mix Face + Body 30 new brands launched this year including 10 from Estee family Fragrance launched Stable average basket value

16 Fashion with Integrity People Mapping supplier base, transparency Worker Voice helplines, Gender Equality Work place safety Second Modern Slavery Statement Product 80% sustainable cotton this year, 100% before 2025 ASOS Brands 34% sustainable fibres now Local actions on chemicals, carbon emissions and water pollution / waste Recycling (circularity) - Trained for 100% Design for circularity by UK and Germany takeback trials Packaging Targeting supply side sustainable by 2025 Outbound bags currently contain 25% recycled material and are recyclable

17 Warehousing Building capacity, driving efficiency FY18: 25 million additional unit capacity FY19: Driving efficiency to enable reinvestment into proposition UK Hub Mezzanine extension +2 million capacity New Doncaster multi use facility +3 million capacity Euro Hub Completed extension +10 million capacity Installation, commissioning & testing of automation begun Warehouse Cost % Sales 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 10.0% 7.7% 8.5% 7.9% 8.8% 5.9% 5.8% FY12 FY13 FY14 FY15 FY16 FY17 FY18 Target return to c.8% US Hub Built & commissioned new distribution centre +10 million capacity Automation to follow Returns Processing New Poland facility +550k units per week New Czech Republic facility +550k units per week

18 Tech Best in class tech driving engagement 2,900 Tech releases Localisation across 200 markets New language sites for Sweden & Netherlands Denmark & Poland coming next Enki AI powered conversational interface Google Assistant product search Personalisation continues to progress Recommendation algorithms Very strong app engagement

19 Our US opportunity Gearing up for a new ASOS US chapter Atlanta unlocks next stage of our growth opportunity Segmentation & localisation to follow EU approach Targeted focus on acquiring fashion audience Maximise new branded offer Build foundations for growth in awareness

20 Summary Our four defendable pillars, differentiating our brand Purpose Product Proposition People Momentum continues no change to guidance Continuing to invest ahead of growth another step on the road to becoming the world s number one destination for fashion loving 20- somethings 14

21 Q&A Please wait for the microphone and then state your name and institution. 15

22 Appendix 16

23 Five year summary 5 years to 31 August 2018 GROUP REVENUE ( M) GROSS PROFIT ( M) 29% 26% 33% 1, % 18% , % 1, % 1, , % % % FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 EBITDA ( M) 48.9% EBIT ( M) (60bps) (1%) 2% % % % (4%) (12%) % % % FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 YOY growth rate Note: All comparative numbers exclude results from discontinued operations in China

24 Five year KPI summary FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Active customers 8.8m (+25%) 9.9m (+13%) 12.4m (+25%) 15.4m (+24%) 18.4m (+19%) Visits growth +20% +19% +22% +24% +19% % Visits on mobile 46.9% (+3210bps) 57.9% (+1100bps) 65.5% (+760bps) 70.3% (+480bps) 77.0% (+670bps) Orders growth +31% +16% +30% +30% +27% Order frequency +4% +3% +4% +5% +7% Conversion +20bps - +10bps +20bps +20bps Average basket value +3% +9% +3% +2% +1% Subject to rounding

25 Operational KPIs ACTIVE CUSTOMERS AVERAGE SELLING PRICE AVERAGE UNITS PER BASKET FY17 FY18 FY17 FY18 FY17 FY18 ANNUAL ORDER FREQUENCY AVERAGE BASKET VALUE FY17 FY18 FY17 FY18

26 Global Positioning UK Europe 1 60,000M 50,000M 40,000M 30,000M 20,000M 10,000M 0K % 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 350,000M 300,000M 250,000M 200,000M 150,000M 100,000M 50,000M 0K % 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% Online Market Total Market ASOS market share Online Market Total Market ASOS market share US Rest of World 2 350,000M 300,000M 250,000M 200,000M 150,000M 100,000M 50,000M 0K % 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% 800,000M 700,000M 600,000M 500,000M 400,000M 300,000M 200,000M 100,000M 0K % 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% Online Market Total Market ASOS market share Online Market Total Market ASOS market share Source: Global Data and ASOS estimates 1 EU data for 22 European countries available through Global Data 2 ROW data for 25 Rest of World countries available through Global Data

27 Statement of Comprehensive Income FY 2018 FY 2017 Change % m Revenue 2, , % Cost of sales (1,180.2) (965.3) (22%) Gross profit 1, % Distribution expenses (380.8) (299.2) (27%) Administrative expenses 1 (754.4) (579.5) (30%) Operating profit % Net finance income Profit before tax % Income tax expense (19.6) (15.9) Profit after tax Effective tax rate 19.2% 19.9% 1 Administrative expenses include non-cash share based payment charges of 8.9m (2017: 7.6m)

28 FY18 Segmental sales reported growth m Four months to 31 December 2017 Growth Two months to 28 February 2018 Growth Four months to 30 June 2018 Growth Two months to 31 August 2018 Growth UK retail sales % % % % EU retail sales % % % % US retail sales % % % % ROW retail sales % % % % International retail sales % % % % Total retail sales % % % % Total group revenues % % % %

29 FY18 Segmental sales CCY 1 growth m Four months to 31 December 2017 Growth Two months to 28 February 2018 Growth Four months to 30 June 2018 Growth Two months to 31 August 2018 Growth UK retail sales % % % % EU retail sales % % % % US retail sales % % % % ROW retail sales % % % % International retail sales % % % % Total retail sales % % % % Total group revenues % % % % 1 Constant currency is calculated to take account of hedged rate movements on hedged sales and spot rate movements on unhedged sales

30 Total operating costs m FY 2018 % of sales FY 2017 % of sales Change % Change in % of sales Distribution costs % % (27%) (20bps) Payroll and staff costs % % (19%) 50bps Warehousing % % (43%) (120bps) Marketing % % (23%) 10bps Production % % (3%) - Technology % % (25%) - Other operating costs % % (39%) (40bps) Depreciation % % (29%) (10bps) Total Operating costs 1, % % (29%) (130bps) 1 Inclusive of 8.9m non-cash share based payment charges (2017: 7.6m)

31 Global order contribution analysis FY 2018 Group total UK EU US RoW International Total Gross profit excluding third party revenues ( m) 1, Distribution costs ( m) (380.8) (108.0) (104.9) (79.6) (88.3) (272.8) Total contribution ( m) Number of orders (m) Contribution per order ( ) FY 2017 contribution per order ( ) Variance 2% (5%) 26% (2%) (12%) 6%

32 Consolidated Statement of cashflows m At 31 August 2018 At 31 August 2017 Operating profit Depreciation and amortisation Loss on disposal of non-current assets Fixed asset impairment 2.7 Working capital (62.4) 24.1 Share-based payments charge Other non-cash items 0.5 (0.6) Tax paid (13.1) (7.6) Cash inflow from operating activities Capital expenditure (213.0) (161.5) Net finance income received Net cash inflow relating to EBT Total cash outflow (117.3) (13.3) Opening cash and cash equivalents Effect of exchange rates on cash and cash equivalents (0.3) 0.3 Closing cash and cash equivalents Employee Benefit Trust and Capita Trust

33 Key definitions KEY TERMS AND DEFINITIONS Retail sales Sales of goods through our internet sites, net of returns Group revenues Retail sales, delivery receipts and third party revenues Net funds Cash and cash equivalents less bank borrowings Average basket value Total order value including VAT and excluding returns, divided by total orders Average units per basket Total orders divided by total units sold, excluding returns Average selling price per unit Active customers Return on invested capital Total order value including VAT and excluding returns, divided by total units sold Customers who have shopped with ASOS during the last 12 months, as at 31 August Profit before interest, exceptional items and discontinued operations but after tax, divided by average invested capital (net assets minus cash balance and hedging reserve)

34 FORWARD LOOKING STATEMENTS AND DISCLAIMER Forward looking statements: This announcement may include statements that are, or may be deemed to be, "forward-looking statements" (including words such as "believe", "expect", "estimate", "intend", "anticipate" and words of similar meaning). By their nature, forwardlooking statements involve risk and uncertainty since they relate to future events and circumstances, and actual results may, and often do, differ materially from any forward-looking statements. Any forward-looking statements in this announcement reflect management's view with respect to future events as at the date of this announcement. Save as required by applicable law, the Company undertakes no obligation to publicly revise any forward-looking statements in this announcement, whether following any change in its expectations or to reflect events or circumstances after the date of this announcement. Disclaimer: This presentation and information communicated verbally to you may contain certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of ASOS plc ( ASOS ). These statements are based on current expectations and involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Any of the assumptions underlying these forward-looking statements could prove inaccurate or incorrect and therefore any results contemplated in the forward-looking statements may not actually be achieved. Nothing contained in this presentation or communicated verbally should be construed as a profit forecast or profit estimate. Investors or other recipients are cautioned not to place undue reliance on any forward-looking statements contained herein. ASOS undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statement, whether as a result of new information, future events or other circumstances. Neither this presentation nor any verbal communication shall constitute an invitation or inducement to any person to subscribe for or otherwise acquire securities in ASOS.